Social Security benefits include monthly retirement, survivor, and disability benefits; they do not include Supplemental Security Income (SSI) payments, which are not taxable. Generally, you pay federal income taxes on your Social Security benefits only if you have other substantial income in addition to your benefits. Your income and filing status affect whether you must pay taxes on your Social Security. About 40 percent of people who get Social Security must pay income taxes on their benefits.
Refundable vs. Non-refundable Tax Credits
Tax credits can reduce your tax bill or give you a bigger refund, but not all tax credits are created equal. While most tax credits are refundable, some credits are nonrefundable. Still, before we look at the difference between refundable and nonrefundable tax credits, it’s important to understand the difference between a tax credit and a tax deduction.
New Online Option for Certain IRS Notices
Taxpayers who receive certain notices requiring them to send information to the IRS can now submit their documentation online through IRS.gov. This new secure step will allow taxpayers or their tax professionals to upload documents electronically rather than mailing them in, helping reduce time and effort in resolving tax issues.
What To Do if You’re Missing Important Tax Documents
As the April 18th tax deadline quickly approaches, last-minute tax filers should make sure they have all their documents before filing a tax return. You should have received a Form W-2, Wage, and Tax Statement from each of your employers for use in preparing your federal tax return. Employers must furnish this record of 2022 earnings and withheld taxes no later than January 31, 2023. As such, most taxpayers should have received their documents near the end of January, including:
- Forms W-2, Wage and Tax Statement
- Form 1099-MISC, Miscellaneous Income
- Form 1099-INT, Interest Income
- Form 1099-NEC, Nonemployee Compensation
- Form 1099-G, Certain Government Payments; like unemployment compensation or state tax refund
State Payments Excluded From 2022 Federal Returns
Taxpayers in 21 states received special payments related to general welfare and disaster relief in 2022. However, according to recently issued guidance from the IRS, they will not need to report these payments on their 2022 federal tax returns. The special tax refunds or payments made by certain states were related to the pandemic and its associated consequences. Generally, payments made by states are includable in income for federal tax purposes. Due to this unique and complex situation, the rules surrounding their treatment for federal income tax purposes are more complex.
Five Overlooked Tax Breaks for Individuals
Are you confused about which credits and deductions you can claim on your 2022 tax return? You’re not alone. With tax law becoming more complicated every year, it’s hard to remember which tax breaks are available in any given year. With that in mind, here are five tax breaks you might not want to overlook.
There’s Still Time To Make an IRA Contribution for 2022
If you haven’t contributed funds to an Individual Retirement Account (IRA) for tax year 2022 or put in less than the maximum allowed, you still have time to do so. You can contribute to either a traditional or Roth IRA until the April 18, 2023, due date, not including extensions.
Tax FOMO: Are You Losing $1,000s in Tax Savings?
The Power of Hiring a CPA (And What Could Happen if You Don’t)
You know about FOMO or “fear of missing out” when it comes to skipping a good party. You should also have a very healthy fear of losing out on tax savings. How? By trusting anyone other than a qualified CPA to handle your taxes!
While we are a NYC-based CPA firm, our clients are national and international.
What Is the Saver’s Credit?
The Retirement Savings Contributions Credit, also known as the Saver’s Credit, is a special tax credit for low-and moderate-income workers. In tax year 2020, the most recent year for which complete figures are available, Saver’s Credits totaling more than $1.7 billion were claimed on about 9.4 million individual income tax returns. That’s an average of about $186 per eligible return.
Taxable vs. Nontaxable Income
Are you wondering if there’s a hard and fast rule about what income is taxable and what income is not? The quick answer is that all income is taxable unless the law specifically excludes it. But as you might have guessed, there’s more to it than that.
Taxable income includes any money you receive, such as wages, tips, and unemployment compensation. It can also include noncash income from property or services. For example, both parties in a barter exchange must include the fair market value of goods or services received as income on their tax return.